ITC TRANSFER ON DEATH OF PROPRIETOR

[SANTOSH PATIL]

sir/madam, i would like suggestion and expert opnion on my clients case. my client a scrap dealer died on 10th november 2022, on that day ITC of 6 lakh was available in his credit ledger. He is survived by daughter who is only legal heir. she is married and houswife. His son in law is also dealer of scrap but being turnover below taxable he is unregistered. Can Input Tax credit be transfered to his son in law by transfering stock and filing ITC 02. If yes any special procedure is required.

[Amit Agrawal]

'Legal heir' does not include son-in-law, generally speaking, unless and until there is 'will' left specific to such effect by the deceased person.

For some practical aspects involved in such cases, you may read article (ID: 10839) on TMI bearing subject-line as: GST: Transfer of Business in the case of Death of Proprietor

Link to article is: https://www.taxtmi.com/article/detailed?id=10839

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

In this context, also peruse Board's Circular No. 96/15/2019-GST, dated 28-3-2019

AI Summary

Input tax credit transfer: cannot pass to a non legal heir such as son in law absent a will; use ITC 02 procedure.
Transferability of ITC on a proprietor's death is limited to lawful successors: a son in law is not a legal heir absent an express will. Transfer should be effected as a transfer of business with compliance steps such as filing Form ITC 02 where appropriate, and by following administrative guidance including Board Circular No. 96/15/2019 GST.